We recently published a list of 10 Michael Burry Stocks with Huge Upside Potential. In this article, we are going to take a look at where The Estée Lauder Companies Inc. (NYSE:EL) stands against other Michael Burry stocks with huge upside potential.
Michael Burry, founder and manager of Scion Asset Management, is best known for predicting and profiting from the housing bubble’s collapse in the mid-2000s. His bold contrarian bet was famously chronicled in the book and film “The Big Short.” Burry’s investment strategy draws heavily from the rigorous market analysis and principles outlined in Benjamin Graham and David Dodd’s 1934 book “Security Analysis.” The book championed the merits of financial statement analysis, highlighting the importance of intrinsic value and structured investment principles.
That said, Burry has never shied away from putting his own distinct stamp on Wall Street’s time-tested principles. By utilizing complex financial tools, such as derivative securities and short-selling, Burry has amassed a fortune, challenging conventional market wisdom. His 2001 Scion Value Fund letter provides a fascinating insight into his contrarian outlook, which prioritizes long-term value over short-term price fluctuations. Burry makes it clear that to achieve significant long-term returns, he is willing to tolerate short-term volatility. He stated:
“I will always choose the dollar bill carrying a wildly fluctuating discount rather than the dollar bill selling for a quite stable premium.”
He also has no qualms about making significant investments in a few stocks that he believes are undervalued, a tactic the investor employed to strengthen Scion’s holdings at the end of 2024.
In the quarter that ended on December 31, 2024 just before DeepSeek’s artificial intelligence breakthrough sparked a $1.3 trillion surge in Chinese tech stocks, Michael Burry offloaded some of his investments in the country’s tech stocks. The moves came amid a period of high volatility for Chinese stocks, when investors appeared to be losing faith in Beijing following the implementation of a stimulus package in late September. The government’s actions triggered a wild rally until early October, though momentum waned due to a property crisis, a poor economic outlook, and dissatisfaction with the scope of fiscal stimulus in the following months.
Our Methodology
For this article, we examined Scion Asset Management’s Q4 2024 13F filings to list down Michael Burry’s stock picks with the highest upside potential. We ranked the companies in ascending order of their upside potential. These equities are also popular among elite hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A close-up of a customer’s hands selecting beauty products from an online retailer.
The Estée Lauder Companies Inc. (NYSE:EL)
Scion Asset Management’s Q4 Stake: $7.49 million
Analyst Upside as of May 9: 14.97%
Number of Hedge Fund Holders: 49
The Estée Lauder Companies Inc. (NYSE:EL) is a well-known American multinational cosmetics company that manufactures and markets makeup, skincare, fragrances, and hair care products. The company boasts a presence in over 150 countries and territories under numerous brand names, including Estée Lauder, Aramis, and Clinique.
The Estée Lauder Companies Inc. (NYSE:EL) reported third-quarter fiscal year 2025 earnings of $0.65 per share, which exceeded the expected $0.31. The company’s revenue surpassed estimates, reaching $3.55 billion compared to the expected $3.52 billion. Despite its outstanding financial performance, Estee Lauder faces challenges, including a 9% reduction in organic sales and a 28% loss in Travel Retail sales. Estee Lauder’s management also expects an organic sales drop of 8% to 9% in fiscal year 2025, with adjusted EPS ranging from $1.30 to $1.55.
On May 2, UBS analyst Peter Grom raised his price target on The Estée Lauder Companies Inc. (NYSE:EL) to $62, up from $60, while keeping a Neutral rating on the company’s shares. Grom acknowledged Estée Lauder’s third consecutive quarterly earnings beat, citing better profitability. However, he noted that the company’s near-term quarterly projection fell short of the expectations. Grom discussed the company’s attempts to increase transparency about its near-term financial prospects and the possible impact of tariffs. Nonetheless, he implied that investors may still be concerned about the company’s earnings potential for fiscal year 2026 due to a lower fourth-quarter exit rate and tariff uncertainty.
Overall, EL ranks 9th on our list of Michael Burry stocks with huge upside potential. While we acknowledge the potential for EL as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than EL but trades at less than 5 times its earnings, check out our report about this cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
